Singapore robo advisory competition heats up with Syfe's debut

Singapore’s Syfe has officially launched its robo-advisory service, heating up competition in the city state’s digital asset management industry.

The new kid on the block bows in two years after StashAway became Singapore’s first robo adviser.

With Syfe’s debut, there are now at least six independent robo advisers in the city state. The others are AutoWealth, Smartly, MoneyOwl and endowus.

Several local financial institutions, including Oversea-Chinese Banking Corp and United Overseas Bank, also operate their own robo-advisory services.

These robo advisers largely target customers within Singapore, although most also offer their services to non-residents.

Even though Syfe faces competition, its entry into the market is timely because Singapore’s digital asset management industry is still at an early stage of growth, according to a fund manager at a European asset management firm.

"Although robo advisers are not new in Singapore, there are still not many investors that have come on board. So, the growth potential is definitely there," the Kuala Lumpur-based fund manager tells Asia Asset Management, speaking on condition of anonymity.

"However, there needs to be continuous efforts by the industry in terms of investors' education, and increasing the awareness of the benefits of robo advisers,” he adds.

According to latest figures from data provider Statista, there were 69,300 users of robo-advisory services in Singapore in 2017. It expects the number to grow almost seven-fold to 461,900 by 2023.

Statista also predicts assets under management of Singapore-based robo advisers will jump to US$9.05 billion by 2023, from $903 million in 2017.

Syfe was founded by former investment banker Dhruv Arora, who is also chief executive officer of the company. Before setting up Syfe, he was a vice president at Grofers, an e-groceries startup in India.

Prior to that, Mr. Arora was director of exchange-traded funds, portfolio trading and global equity finance at UBS Investment Bank for seven years.

Syfe uses its "proprietary data-driven algorithm to construct personalised portfolios, making investing accessible to everyone", the company says in a statement on July 17.

It says the automated platform is "easy to use and affordable". There is no minimum investment requirement, and the annual fee is 0.65% of the total amount invested.

Meanwhile, Syfe says it has raised S$5.2 million ($3.83 million) in seed funding, and identified UK-based venture capital fund Unbound as one of its key investors.

Other investors in the seed funding round include David Rogers, managing director of State Street Global Advisors, Paul Redbourn, managing director and head of equities at UBS Japan, and Philip Freise, a partner at KKR.